Business news at a glance

Extraordinary wealth created by the pandemic housing market

Over the past two years, Americans who own their homes have gained more than $6 trillion in housing wealth. To be clear, that doesn't mean homebuilders have transferred to buyers $6 trillion worth of new housing, or that existing homeowners have made $6 trillion in kitchen and bathroom upgrades. Rather, most of this money has been created by the simple fact that housing, in short supply and high demand across the U.S., has appreciated at record pace during the pandemic. Millions of people - broadly spread among the 65% of American households who own their home - have gained a share of this windfall.

Berkshire Hathaway reports drop in earnings, driven by investment losses

Berkshire Hathaway, an insurance and investing conglomerate run by billionaire Warren Buffett, reported Saturday a significant drop in earnings in the first quarter. Profits at the company, which owns a diverse array of American brands from car insurer Geico to ice cream chain Dairy Queen, fell to $5.4 billion. That was down 53% from the nearly $12 billion that it earned in the same three months a year ago. Much of the drop was driven by Berkshire's large stock portfolio, which lost nearly $1.6 billion in the first three months of the year.

Why Americans became more vulnerable to oil price spikes

More than a decade ago, when Americans faced surging prices at the pump, policymakers developed a vision to wean people off gas and oil: more efficient cars, more compact and walkable communities, more renewable energy. Then the country lost momentum. A surge in oil and gas production at home, as well as a flood of cheap crude overseas, ushered in an era of lower energy prices. Ramping up supply, rather than reining in demand, came to define America's push for energy independence. Yet the nation's expansion of drilling over the past decade has ultimately made households vulnerable to volatile price swings.

Wall Street battered by rising fear about the economy

April was the worst month for Wall Street since the March 2020 panic over the coronavirus, capped by a plunge in stocks Friday. The S&P 500 fell 8.8% for the month and is down more than 13% in 2022, a drop that shows many investors are coming to the same conclusion: The economy is about to take a hit, and everywhere they look, they see trouble ahead. On Friday alone, the S&P 500 slid 3.6% after tech giants Amazon and Apple reported their results for the start of the year, crystallizing fears of rising costs and supply constraints.

Musk's ties to China could create headaches for Twitter

When Elon Musk opened a Tesla factory in Shanghai in 2019, the Chinese government welcomed him with billions of dollars' worth of cheap land, loans, tax breaks and subsidies. Tesla's road since then has been lucrative, but not without problems. The firm faced a consumer and regulatory revolt in China last year over manufacturing flaws. With his deal to take over Twitter, Musk's ties to China are about to get even more fraught. Musk's investments in China could be at risk if Twitter upsets the Communist Party state, which has banned the platform at home but used it to push Beijing's foreign policy.

Fed on track for big interest rate increase

The price index that the Federal Reserve watches most closely climbed 6.6% in the year through March, the fastest pace of inflation since 1982. But much of the gain was driven by a pop in energy prices that came early in Russia's invasion of Ukraine along with rising food costs. After stripping out volatile food and fuel prices, the index climbed by a more muted 5.2% in the year through March. That hint of moderation is likely a welcome sign for the Fed but not enough to prevent policymakers from making a large rate increase at their meeting next week.

Exxon Mobil and Chevron report big jump in profits

Exxon Mobil and Chevron on Friday reported a second consecutive quarter of robust earnings as oil and natural gas prices continued to rise after the Russian invasion of Ukraine. Exxon reported doubling quarterly earnings from a year ago, even after a write-down of $3.4 billion from abandoning its operations in Russia. Chevron reported a $6.3 billion profit, up from $1.37 billion in the same quarter in 2021. Its revenues jumped to $54.37 billion from $32 billion last year. Both companies reported weaker results in international refining, due partially to higher costs and lower profitability of refined products.

By wire sources